Donation of Land and Title Transfer in the Philippines
A 2025 practitioner’s guide
1. Governing sources
| Subject | Key authority | Snapshot |
|---|---|---|
| Capacity, form, acceptance, revocation | Civil Code, Arts. 734-764 citeturn2view0 | |
| Constitutional limit on donee’s capacity (foreigners) | 1987 Const., Art. XII §7 and case law citeturn12view0 | |
| Registration of Torrens titles | P.D. 1529 (Property Registration Decree) | |
| Donor’s-tax rules | NIRC (Secs. 98-104) as amended by TRAIN; RR 12-2018 citeturn10search1 | |
| Filing & requirements | BIR Form 1800 Guidelines (Jan 2018) citeturn15view0 | |
| eCAR validity | RR 12-2024 – no more 5-year expiry citeturn5view0 | |
| Local transfer tax | LGC 1991, §135 (0.50 % province / 0.75 % cities, Metro Manila) | |
| Documentary-stamp tax | NIRC §196 (₱15 per ₱1 000 of FMV) |
2. Types of donations involving land
| Classification | Tax & succession impact |
|---|---|
| Inter vivos (takes effect now) – must be in a notarized public instrument; acceptance in the same instrument or a separate one served on the donor. citeturn2view0 | Immediately subject to 6 % donor’s tax (if ≥ ₱250 000 aggregate gifts in the calendar year). |
| Mortis causa (takes effect at death) – governed by testamentary rules; no donor’s tax but enters the estate (6 % estate tax). | |
| Onerous / mixed – subject partly to VAT/CGT if burden approximates value given. | |
| Conditional / mode-imposing – revocable upon non-fulfilment. |
3. Requisites for validity
Capacity of parties
- Donor must have free disposal of the property at the time of the gift.
- Donee must not be disqualified under Art. 739 (concubinage, crime, public-officer bribes) citeturn2view0
- Foreigners may not receive land (except by hereditary succession). Any deed in their favour is void and cannot ripen into ownership. citeturn12view0
Form – public deed describing the parcel and charges; notarization is indispensable. Acceptance may be:
- in the same deed (most efficient), or
- in a separate public instrument delivered to the donor and noted on both deeds. citeturn2view0
Substantive limits
- The donor cannot give more than the disposable portion of his estate (respect for legitimes).
- Must reserve enough property for self-support and dependents (Art. 750).
Possible grounds for revocation
- Birth or adoption of a child after the donation (Arts. 760-764).
- Ingratitude (serious offenses of the donee).
- Non-fulfilment of conditions.
4. Tax and fee matrix (current as of 25 April 2025)
| Levy | Rate / basis | Deadline / trigger | Who pays |
|---|---|---|---|
| Donor’s tax | 6 % of net FMV in excess of annual ₱250 000 exemption (per donor) citeturn15view0 | File BIR Form 1800 within 30 days from notarization; pay at RDO of donor. citeturn15view0 | Donor (may be passed on by agreement). |
| Documentary-stamp tax | ₱15 per ₱1 000 of whichever is higher: zonal value, assessor’s FMV, or declared FMV (Sec. 196, NIRC) | Paid together with donor’s tax (ONETT lane). | Donor |
| Local transfer tax | 0.50 % (province) / 0.75 % (cities, MM) of FMV | Usually 60 days from notarization (LGU ordinance). | Donee (practice varies) |
| Registration fees (RD) | Sliding scale + legal research fund (~0.25 %) | Upon presentation of CAR/eCAR. | Donee |
| Notarial fee | ~1 % of FMV or by agreement | At execution. | Donor |
Tax-free gifts: donations to the National Government, its agencies, or accredited NGOs, and gifts for priority projects under Sec. 101(A) are exempt from donor’s tax but still pay DST and registration. citeturn10search1
5. Step-by-step title transfer (Torrens system)
| Stage | What to do | Time-frame / tips |
|---|---|---|
| 1 – Draft & notarise Deed of Donation | Attach TINs, marital statuses, technical description; secure at least 8 copies. | Use the latest DENR-approved survey or CCT/TCT technical description. |
| 2 – BIR One-Time Transaction | Submit deed, IDs, CT-certified Title & Tax Declarations, SPA if needed. Pay 6 % donor’s tax + DST; BIR issues eCAR (now no expiry under RR 12-2024). citeturn5view0 | File within 30 days; processing 5-15 working days depending on RDO. |
| 3 – LGU Treasurer | Pay local transfer tax; obtain tax clearance & Treasurer’s annotation on the deed. | Many LGUs require payment before going to RD. |
| 4 – Registry of Deeds | Present owner’s duplicate title, eCAR, tax receipts, DAR clearance (if agricultural), and pay registration fees. RD cancels the donor’s title and issues a new TCT/OCT in the donee’s name. | Current processing: 10-20 working days; check e-LRA status online. |
| 5 – Assessor’s Office | Secure new Tax Declaration(s) in the donee’s name and update Real Property Tax (RPT) roll. | Bring new TCT & RD-certified deed. |
Field guide: An illustrated cheat-sheet widely used by conveyancing firms appears in PropertyMart’s 2025 checklist. citeturn4view0
6. Special situations & practice pointers
| Scenario | Key rule / document |
|---|---|
| Conjugal or community property | Both spouses must sign the deed (Art. 96/124 Family Code). |
| Donation to a minor | Acceptance is by parents/guardian; annotation of authority required. |
| Agricultural land | Secure DAR Clearance or proof within retention limit; CARP-covered land requires VOS/CA. |
| Donation with reservation of usufruct | Perfectly valid (Art. 756); describe the reserved right and annotate it on the title. |
| Staggered gifts for tax planning | Keep yearly land values ≤ ₱250 000 to remain tax-exempt, but watch out for BIR’s anti-tax-avoidance rules (Sec. 102, NIRC). |
| Collation | Gifts to compulsory heirs are “brought into hotchpot” on succession (Art. 1061); keep records to avoid disputes. |
| Foreign donee | Deed is VOID ab initio; RD will refuse registration; donor’s tax may still be assessed because the tax attaches to the act of donation even if void. |
7. Common pitfalls
- Late filing – 25 % surcharge + 12 % p.a. interest on donor’s tax.
- Using an “acknowledgement of receipt” instead of a formal acceptance clause.
- Relying on assessor’s FMV when the zonal value is higher – BIR will recompute.
- Submitting an expired eCAR (for older transactions) – must now request conversion to the indefinite eCAR under RR 12-2024.
- Omitted DAR clearance for agricultural lots – causes RD denial even with eCAR.
8. Looking ahead (2025+)
- The pending Real Property Valuation and Assessment Reform Act (House Bill 6557; cited by the DOF) aims to unify valuation—expect BIR and LGU bases to converge.
- e-title issuance has rolled out in 60 % of RDs; electronic deeds are still pilot-only.
- Heightened scrutiny of anti-dummy schemes (lease-option arrangements) following the Supreme Court’s 2022 line of cases; donations are likewise monitored for circumvention.
Take-aways
A valid donation of land is more than a signed deed: it is a carefully sequenced tax-compliance and registration exercise framed by strict Civil-Code formalities and constitutional policy. Follow the statutory timelines (30-day filing, LGU window), budget for roughly 8-9 % of fair-market value in cumulative taxes & fees, and verify every clearance before presenting documents to the Registry of Deeds. When in doubt, secure a pre-filing conference with the BIR ONETT officer or consult a Philippine real-estate lawyer.
(This article is for general guidance as of 25 April 2025 and does not constitute formal legal advice.)